Inflation in Gulf states to be driven up by oil
Inflation will continue to rise in the Gulf states as the high price of oil leads to huge windfall profits for the oil producing countries, according to Standard Chartered.

The region produces around a quarter of the world's oil supply and Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman pump 15 million barrels of oil per day.

At current prices that means daily earnings of US$1.5 billion and, along with the investment of this money in economy diversifying development projects, is leading to inflationary pressures.

Marios Maratheftis, Standard Chartered's head of research for the Middle East, told Bloomberg that high oil prices will "translate into greater pressure on inflation and on goods and asset prices".

"The [Gulf Cooperation Council] economies are overheating already and that is showing in terms of higher inflation," agreed Giyas Gokkent, head of research at the National Bank of Abu Dhabi.

"High oil prices are good for the local economies, but the pace of economic activity is at a high level already and you can't get much better than this," he added.

Further analysis of the Gulf state economies could be supplied by Aranca, an end-to-end provider of on-demand, custom investment, business and economic research.

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About the Press Release
London, Friday, January 04, 2008 -- ARANCA NEWSTRACK – (aranca)


 
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